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Vmware Inc (VMW) Stock Fundamental Analysis

NYSE:VMW - New York Stock Exchange, Inc. - US9285634021 - Common Stock - Currency: USD

142.48  -7.43 (-4.96%)

Premarket: 143 +0.52 (+0.36%)

Fundamental Rating

5

VMW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. While VMW has a great profitability rating, there are quite some concerns on its financial health. VMW has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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8

1. Profitability

1.1 Basic Checks

VMW had positive earnings in the past year.
VMW had a positive operating cash flow in the past year.
VMW had positive earnings in each of the past 5 years.
In the past 5 years VMW always reported a positive cash flow from operatings.
VMW Yearly Net Income VS EBIT VS OCF VS FCFVMW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B

1.2 Ratios

With an excellent Return On Assets value of 4.43%, VMW belongs to the best of the industry, outperforming 82.92% of the companies in the same industry.
VMW has a Return On Equity of 55.99%. This is amongst the best in the industry. VMW outperforms 97.86% of its industry peers.
VMW's Return On Invested Capital of 7.86% is amongst the best of the industry. VMW outperforms 85.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VMW is below the industry average of 12.03%.
Industry RankSector Rank
ROA 4.43%
ROE 55.99%
ROIC 7.86%
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
VMW Yearly ROA, ROE, ROICVMW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100 -100 200 -200

1.3 Margins

VMW's Profit Margin of 10.48% is amongst the best of the industry. VMW outperforms 84.70% of its industry peers.
In the last couple of years the Profit Margin of VMW has grown nicely.
The Operating Margin of VMW (14.00%) is better than 84.70% of its industry peers.
VMW's Operating Margin has declined in the last couple of years.
VMW's Gross Margin of 81.19% is amongst the best of the industry. VMW outperforms 86.83% of its industry peers.
VMW's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 14%
PM (TTM) 10.48%
GM 81.19%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
VMW Yearly Profit, Operating, Gross MarginsVMW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60 80

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VMW is destroying value.
VMW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, VMW has more shares outstanding
VMW has a better debt/assets ratio than last year.
VMW Yearly Shares OutstandingVMW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M
VMW Yearly Total Debt VS Total AssetsVMW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.2 Solvency

VMW has an Altman-Z score of 1.85. This is not the best score and indicates that VMW is in the grey zone with still only limited risk for bankruptcy at the moment.
VMW has a Altman-Z score (1.85) which is comparable to the rest of the industry.
VMW has a debt to FCF ratio of 2.25. This is a good value and a sign of high solvency as VMW would need 2.25 years to pay back of all of its debts.
The Debt to FCF ratio of VMW (2.25) is better than 73.67% of its industry peers.
A Debt/Equity ratio of 3.73 is on the high side and indicates that VMW has dependencies on debt financing.
VMW's Debt to Equity ratio of 3.73 is on the low side compared to the rest of the industry. VMW is outperformed by 87.19% of its industry peers.
Even though the debt/equity ratio score it not favorable for VMW, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
Industry RankSector Rank
Debt/Equity 3.73
Debt/FCF 2.25
Altman-Z 1.85
ROIC/WACC0.77
WACC10.18%
VMW Yearly LT Debt VS Equity VS FCFVMW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

VMW has a Current Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
VMW has a Current ratio of 0.87. This is amonst the worse of the industry: VMW underperforms 82.56% of its industry peers.
A Quick Ratio of 0.87 indicates that VMW may have some problems paying its short term obligations.
VMW has a worse Quick ratio (0.87) than 81.49% of its industry peers.
Industry RankSector Rank
Current Ratio 0.87
Quick Ratio 0.87
VMW Yearly Current Assets VS Current LiabilitesVMW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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5

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 3.90% over the past year.
VMW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.63% yearly.
The Revenue has been growing slightly by 3.56% in the past year.
VMW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.17% yearly.
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%

3.2 Future

VMW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.04% yearly.
The Revenue is expected to grow by 8.40% on average over the next years. This is quite good.
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
VMW Yearly Revenue VS EstimatesVMW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B 25B
VMW Yearly EPS VS EstimatesVMW Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

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6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 20.59, which indicates a rather expensive current valuation of VMW.
Based on the Price/Earnings ratio, VMW is valued cheaper than 85.77% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.99. VMW is valued slightly cheaper when compared to this.
VMW is valuated rather expensively with a Price/Forward Earnings ratio of 17.40.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 85.41% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.36. VMW is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 20.59
Fwd PE 17.4
VMW Price Earnings VS Forward Price EarningsVMW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VMW is valued cheaper than 85.41% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VMW indicates a rather cheap valuation: VMW is cheaper than 92.53% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 13.2
EV/EBITDA 20.29
VMW Per share dataVMW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of VMW may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)4.45
EPS Next 2Y12.07%
EPS Next 3Y8.72%

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0

5. Dividend

5.1 Amount

VMW does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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Vmware Inc

NYSE:VMW (11/21/2023, 8:04:00 PM)

Premarket: 143 +0.52 (+0.36%)

142.48

-7.43 (-4.96%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-30 2023-11-30/amc
Earnings (Next)02-29 2024-02-29/amc
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
Analysts53.33
Price Target169.22 (18.77%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-5.43%
Max EPS beat(2)5.79%
EPS beat(4)2
Avg EPS beat(4)0.57%
Min EPS beat(4)-7.68%
Max EPS beat(4)9.61%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-2.35%
Max Revenue beat(2)-2.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-5%
Max Revenue beat(4)1.34%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
Industry RankSector Rank
PE 20.59
Fwd PE 17.4
P/S 4.52
P/FCF 13.2
P/OCF 12.08
P/B 24.15
P/tB N/A
EV/EBITDA 20.29
EPS(TTM)6.92
EY4.86%
EPS(NY)8.19
Fwd EY5.75%
FCF(TTM)10.8
FCFY7.58%
OCF(TTM)11.79
OCFY8.28%
SpS31.52
BVpS5.9
TBVpS-17.18
PEG (NY)2.08
PEG (5Y)4.45
Profitability
Industry RankSector Rank
ROA 4.43%
ROE 55.99%
ROCE 9.79%
ROIC 7.86%
ROICexc 12.08%
ROICexgc 56.72%
OM 14%
PM (TTM) 10.48%
GM 81.19%
FCFM 34.25%
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
ROICexc(3y)12.19%
ROICexc(5y)13.94%
ROICexgc(3y)39.61%
ROICexgc(5y)182.58%
ROCE(3y)11.7%
ROCE(5y)12.97%
ROICexcg growth 3Y-2.41%
ROICexcg growth 5YN/A
ROICexc growth 3Y8.25%
ROICexc growth 5Y-17.26%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
F-Score6
Asset Turnover0.42
Health
Industry RankSector Rank
Debt/Equity 3.73
Debt/FCF 2.25
Debt/EBITDA 2.95
Cap/Depr 32.82%
Cap/Sales 3.16%
Interest Coverage 6.23
Cash Conversion 158.38%
Profit Quality 326.93%
Current Ratio 0.87
Quick Ratio 0.87
Altman-Z 1.85
F-Score6
WACC10.18%
ROIC/WACC0.77
Cap/Depr(3y)34.45%
Cap/Depr(5y)34.05%
Cap/Sales(3y)3.06%
Cap/Sales(5y)2.88%
Profit Quality(3y)236.48%
Profit Quality(5y)194.34%
High Growth Momentum
Growth
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
EBIT growth 1Y-16.59%
EBIT growth 3Y10.12%
EBIT growth 5Y2.37%
EBIT Next Year34.25%
EBIT Next 3Y19.61%
EBIT Next 5YN/A
FCF growth 1Y13.1%
FCF growth 3Y2.33%
FCF growth 5Y5.43%
OCF growth 1Y14.56%
OCF growth 3Y3.56%
OCF growth 5Y5.97%